Development of a Multi-Echelon Inventory Control System Using the Least Square, the Fixed Time Period (FTP), and the Distribution Requirement Planning (DRP) Methods for Replenishment Policies and Strategies

Abstract

The replenishment process problem in the Multi-Echelon inventory control system arises due to the availability of stock at each stock point which is called an unbalanced echelon, where there are echelons that are stock out and overstocked, this affects the company in determining policies in the overall inventory system. This problem can be resolved by making replenishment policies and strategies that consider the company's number, time, and distribution capacity. The method used in this research is to combine the Least Square Method, Fixed Time Period (FTP), and Distribution Requirements Planning (DRP). To prove the feasibility of combining the three methods in implementing and solving replenishment and distribution problems, it is necessary to apply them to company case studies. This research case study on a company that distributes Fast Moving Customer Goods (FMCG) products. Feasibility or suitability can be seen in terms of quantity, cost, and service level. These three things must provide increased value towards improvements in effectiveness and efficiency. This study indicates a decrease in the number of goods, cars, and the frequency of delivery in replenishment so that it can save transportation costs by 28.2% and reduce delivery frequency by 31.9%.